Adam Smith - Providing Morality in a Free Market Economy

Adam Smith’s Theory of Moral Sentiments (TMS) and Wealth of Nations (WN) appear to suffer from an irresolvable tension: TMS extols human sympathy whereas WN extols the consequences of self-interest. This paper takes a comprehensive approach, adding to scholarship on what has become known as the “Adam Smith Problem.” Through a textual analysis of TMS and WN that focuses on prudence, the nature of happiness and Smith’s rhetorical style, the inconsistency between his two texts disappears. The emphasis Smith places on prudence in WN can only be properly understood when one considers its foundations in sympathy found in TMS. By demonstrating the integral connection between morality and markets, Smith provides his reader with the means to critique educators, economists, and skeptics of capitalism